Here's how badly ComfortDelGro was hurt by Singapore Labour Foundation's stake trim

It now holds only 4%.

According to CIMB, ComfortDelGro’s share price skidded 12% today on news that its major shareholder, Singapore Labour Foundation (SLF), trimmed its stake from 12% to 4%.

SLF placed out its shares at S$1.94 apiece, at the low end of its reported S$1.94-2.03 offer range. The identity of the buyers remains unknown, but we think they could be long-term investors.

Here's more from CIMB:

Regulatory filings will be made by 28 May, should there be changes to CD’s substantial shareholders. CD’s share price has fallen below its S$1.94 placement price.

We think the pullback is overdone and the shares may rebound in the near term, in view of: 1) CD’s unchanged fundamentals with defensive earnings; 2) 3% dividend yield support; and 3) the absence of dilution from the placement, which involves only vendor shares.

While the reasons for SLF’s divestment are unknown, we understand that its ownership of CD’s shares was legacy-related. SLF has, over the years, been paring down its stake in CD, to 4% today.

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